Covid deaths cast a long shadow over Liberty’s 2021 insurance claims

Although Covid claims put a dent in Liberty’s life insurance claims last year – accounting for 21.2% of all claims – long Covid claims that fall under the lifestyle protection benefit have only started trickling in this year. 

“The long Covid claims will most likely start coming through in the next few years as we start seeing the long-term impacts, such as an impact on your respiratory system, being diagnosed,” says Tom Crotty, lead specialist for technical marketing at Liberty.

Last year, Liberty paid out R10.12-billion in claims under its flagship Lifestyle Protector, or income protection policy, to 43,600 individual clients and their beneficiaries, representing a whopping 59.6% increase from 2020, when the insurer paid out R6.43-billion in income protection claims. 

The substantial rise was due to the cumulative effects of the two most damaging waves of Covid - the Beta wave in late 2020 and the Delta wave in mid-2021 -  coupled with all the other existing risk events that clients are ordinarily exposed to.  

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“The effects of the pandemic became very real during the year. This was something we had anticipated, and we were able to be there for our clients during this difficult time,” says Liberty’s executive for retail solutions, David Jewell.

“The pandemic demonstrated the value of insurance in that it was a completely unexpected event and a reminder that life doesn’t always follow a predictable course.”

In total, Covid-related claims amounted to R3.47-billion and more than 61% of these claims were related to life cover, including funeral policy claims. 

Retrenchment numbers started stabilising, although retrenchment was still higher than the pre-pandemic numbers seen in 2019, as many ordinary people battled tough economic conditions. 

Retrenchment claims accounted for 7.2% of Liberty’s income protection claims, compared with 8% in 2020. 

However, as much as 40.2% of Liberty’s policy protection claims last year could be attributed to retrenchment. This benefit kicks in when you are retrenched to maintain your existing cover on your other policies when you are not able to meet those payments, and it covers your premium payments for up to six months. 

“Unemployment in South Africa continues to be high and this weighs heavily on many South Africans, but the rate of increase has reduced from what was seen in 2020 during the early lockdown stages,” says Jewell. 

One of Liberty’s additional income protection benefits, the Educator benefit, saw almost 600 claims approved in 2021, with parents or caregivers passing away or being unable to work due to a disability or being diagnosed with a specified critical illness. 

At least R25-million in claims were paid out through this benefit last year, and the value of the total amount approved for the 600 beneficiaries amounted to almost R475-million, without accounting for inflationary increases or any discounting. 

Fourteen percent of all the claim amounts paid under this particular benefit covered supplementary allowances, providing for expenses such as textbooks, uniforms and school transport. BM/DM

 

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